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World Bank and IFC: The Big Bucks Behind Indonesia's Rainforest Destruction

With oil gushing in the gulf, activists locking down in boardrooms, the ball of financial reform being thrown from Wall Street to Washington and back again, and Indonesia announcing a two year freeze on the parceling out of its forests to international corporations, the world's focus seems to be on corporations. But in the struggle to hold onto the last of Indonesia's rainforests - and the biodiversity, culture, livelihoods, and global climate stability these threatened forests provide - recent actions by the multilateral institutions International Finance Corporation (IFC), and the World Bank (WB) must not be ignored. Multilateral institutions, funded by nations worldwide to implement projects, give loans, and steer 'underperforming' economies into globalized capitalism, are big, powerful, and active in Indonesia's forests. The World Bank and its private investment arm, the IFC, have long seen agribusiness as a key growth sector in the tropics. In Indonesia and Papua New Guinea, both groups have given huge loans to encourage the expansion of palm oil and pulp wood plantations, to the benefit of multi-billion dollar corporations like Cargill and Wilmar. [caption id="attachment_7231" align="alignleft" width="300" caption="After developing plantations with World Bank aid money, Cargill sold their PNG palm oil plantations for a profit of hundreds of millions of dollars."][/caption] Encouraged by the palm oil boom in Malaysia that created enormous wealth in that tropical country, the World Bank and IFC began giving out tens of millions of dollars to encourage the same process of industrialization in Indonesia's forests. But rather than work directly with Indonesia's 30 million forest peoples and those that were concerned with the rational use of Indonesia's natural resource wealth, the World Bank made the decision to fund some of the world's largest agribusiness corporations, and trust that Wilmar and Cargill would act responsibly and with concern for the common good. Today, after thirty years of World Bank and IFC's support for the palm oil and pulp and paper industry, the social and environmental consequences of their trust in agribusiness is clear. The rich forests of Sumatra are now almost completely parceled out and in the control of corporations clear cutting the forest to produce forest commodities. The Orang Rimba, one of the world's last truly nomadic cultures, are undergoing a mass exodus because their forest homes have been cleared for palm oil. [caption id="attachment_7228" align="alignright" width="199" caption="Gumpa, and all of the Orang Rimba, are threatened by palm oil expansion"]Gumpa, and all of the Orang Rimba, are threatened by palm oil expansion[/caption] Newly cleared forests to make way for the planting of palm oil and pulp wood burn, releasing smoke plumes that travel for thousands of miles. In Papua New Guinea social unrest and upheaval created by the first industrial monoculture plantations is threatening to tear communities apart. After thousands of media articles, exposes, research projects, and political appeals, The Forest Peoples Programme and Sawit Watch, supported by hundreds of additional environmental, social, and development groups, convinced the World Bank and IFC to freeze all of their projects supporting oil palm plantations. The process started with the Forest Peoples Programme and Sawit Watch filing a complaint with the IFC's own internal auditing office over the destructive and dangerous practices of the palm oil producer Wilmar, which received a loan from the IFC for expansion. [caption id="attachment_7227" align="alignleft" width="300" caption="Oil palm plantations destroy globally important rainforests"]Oil palm plantations destroy globally important rainforests[/caption] The evidence of open burning and social conflict at Wilmar plantations was enough for the IFC to initiate a freeze on their support for oil palm while they carried out a review of their funding policies. Mounting evidence of the negative impacts of their oil palm plantation projects in Papua New Guinea combined with the IFC's internal review to push the World Bank to declare their own moratorium on support for palm oil projects while they undergo their own review of the dangers of palm oil expansion. The decision was one of the biggest wins to protect Indonesia's forests in memory, as much for the implication on the ground for World Bank and IFC expansion projects as for the strong signal the moratorium send to private banks and agribusiness companies. The World Bank's current moratorium serves as a warning to the private sector: the palm oil industry as a whole needs to be treated with great caution. As the multilateral institutions proceed with consultations and internal reviews, and a final decision on palm oil funding is expected soon, almost two hundred leading Indonesian and International voices have called for the World Bank and IFC to implement significant reforms before the Bank returns to funding oil palm. "Major reforms are needed in places like Sarawak and Indonesia to stop oil palm development doing further harm, including land tenure reforms, recognition of indigenous peoples’ rights, a halt to land-grabbing and a ban on clearance of forests and peatlands" says Marcus Colchester of the Forest Peoples Programme. The thirty years of damage from the World Bank and the IFC's support of the oil palm and pulp and paper sectors can not be undone, but immediately implementing needed reforms throughout the entire World Bank Group will be a positive step for Indonesia's forests, forest peoples, and the climate. **This blog post previously mis-characterized the nature and details of the demands put forward by Forest Peoples Program, Sawit Watch, and their allies.  These groups have never called for a permanent moratorium on World Bank funding of palm oil projects; this mis-characterization of their position was the authors mistake. The text of the blog post has been changed to more accurately reflect these groups demands.** Below is the list of environmental and social groups that have submitted and endorsed a statement urging the IFC and World Bank to freeze the funding of oil palm: Submitted by: Forest Peoples Programme Sawit Watch Lembaga Gemawan Scale Up Lestari Negri, Provinsi Riau Serikat Tani Serumpun Damai (STSD), Kabupaten Sambas, Kalimantan Barat SAD Kelompok 113 Sungai Bahar, Kabupaten Batanghari, Provinsi Jambi DebtWatch Indonesia Serikat Petani Kelapa Sawit (SPKS) Jaringan Kerja Pemetaan Partisipatif (JKPP) ELAW Indonesia Setara, Jambi Yayasan PADI Indonesia, Provinsi Kalimantan Timur Supported by: 1.      Nordin, Save Our Borneo, Provinsi Kalimantan Tengah 2.      Rivanni Noor, CAPPA 3.      Hendi Blasius Candra, WALHI Kalimantan Barat 4.      Andi Kiki, Individu 5.      Korinna Horta, Ph.D., Urgewald, Germany 6.      Nasahar, Dewan AMAN NTB 7.      Jelson Garcia, Asia Program Manager, Bank Information Center 8.      Erwin Usman, WALHI Eksekutif Nasional/Ketua Badan Pengurus Nasional Koalisi Anti Utang-KAU) 9.      Victor Mambor, Koordinator PJIK Foker LSM Papua 10.     Dadang Sudardja, Aliansi Rakyat Untuk Citarum – ARUM 11.     Rebecca Tarbotton, Executive Director (Acting), Rainforest Action Network 12.     M. Zulficar Mochtar, Destructive Fishing Watch (DFW) Indonesia 13.     Virginia Ifeadiro, Nigeria 14.     Titi Soentoro, Manila 15.     Hisma Kahman, Individu 16.     Kamardi, Direktorat Perluasan Partisipasi Politik Masyarakat Adat, AMAN 17.     Natalie Bridgeman, Accountability Counsel, USA 18.     Dedi Ratih, WALHI Eksekutif Nasional 19.     Khalid Saifullah, Direktur Eksekutif WALHI Sumatra Barat 20.     Among, KRuHA 21.     Bustar Maitar, Forest Campaign, Team Leader, GREENPEACE South-east Asia 22.     Tri Wibowo, individu 23.     Anuradha Mittal, the Oakland Institute, Oakland, CA, USA 24.     Molly Clinehens, International Accountability Project 25.     Yon Thayrun, Executive Editor, Voice of Human Right Media 26.     Kristen Genovese, Senior Attorney, Center for International Environmental Law 27.     Edy Subahani, POKKER SHK, Kalimantan Tengah 28.     Nasution Camang, Yayasan Merah Putih (YMP) Sulawesi Tengah 29.     Ibrahim A. Hafid, Institut Transformasi Lokal (INSTAL) 30.     Rizal Mahfud, Individu 31.     Sirajuddin, Ketua BPH AMAN Sulawesi Selatan 32.     Mahir Takaka, Wakil Sekretaris Jendral, AMAN 33.     Haitami, Pengurus AMAN Bengkulu 34.     Suryati Simanjuntak, KSPPM Parapat, Sumatra Utara 35.     Arifin Saleh, Pengurus AMAN 36.     Shaban Stiawan, Individu, Kalimantan Barat 37.     Fien Jarangga, Individu, Papua 38.     Frida Klasin, Individu, Papua 39.     Anike Th Sabami, Individu, Papua 40.     Bernadetha Mahuse, Individu, Papua 41.     Bata Manurun, BPH Wilayah AMAN Tana Luwu 42.     Irsyadul Halim, Kaliptra Sumatera, Riau 43.     Don K. Marut, Direktur Eksekutif INFID 44.     Arie Rompas, Walhi Kalimantan Tengah 45.     Ahmad SJA, PADI Indonesia, Balikpapan, Kalimantan Timur 46.     Thomas Wanly, Sampit, Kalimantan Tengah 47.     Datuk Usman Gumanti, Ketua BPH AMAN Wilayah Jambi 48.     Itan, Mitra Lingkungan Hidup Kalimantan Tengah 49.     Chabibullah, Serikat Tani Merdeka (SeTAM) 50.     Asmuni, Sekretaris Jendral, SPKS Paser, Kalimantan Timur 51.     Jazuri, Sekretaris Jendral, SPKS Tanjabar 52.     Lamhot Sihotang, Sekretaris Jenrdal, SPKS Rokan Hulu Riau 53.     Zuki, Sekretaris Jendral, SPKS Kabupaten Sekadau 54.     Riko Kurniawan, Perkumpulan Elang Riau 55.     Rano Rahman, Yayasan Betang Borneo, Kalimantan Tengah 56.     Risma Umar, Solidaritas Perempuan (SP), Jakarta 57.     Abdi Hayat, PERKUMPULAN SERABUT (SEKOLAH RAKYAT BUTUNI) 58.     Mohammad Djauhari, Koordinator KpSHK, Bogor 59.     Diana Gultom, Debtwatch Indonesia 60.     Suzanne Jasper, First Peoples Human Rights Coalition, United States of America. 61.     Jaya Nofyandry, Yayasan Lembaga Bantuan Hukum Lingkungan, Jambi 62.     Jason Pan, TARA-Ping Pu, Taiwan 63.     Thaifa Herizal, ST, Direktur Eksekutif, Atjeh Int'l Development 64.     Hegar Wahyu Hidayat, Eksekutif Daerah WALHI Kalimantan Selatan 65.     Fabby Tumiwa, Institute for Essential Services Reform (IeSR) 66.     Puspa Dewy, Solidaritas Perempuan 67.     Giorgio Budi Indrarto, Koordinator, Indonesia Civil Society Forum on Climate Justice 68.     The Environment and Conservation Organisations of Aotearoa/NZ 69.     Puspa Dewy, Solidaritas Perempuan 70.     Leonardus Bagus, lPPSLH purwokerto 71.     Chandra, WALHI Riau 72.     Heny Soelistyowati, Program Manager - Komunitas Indonesia untuk Demokrasi 73.     Agung Wardana, Nottingham 74.     Haryanto, Belitung 75.     M. Ali Akbar, Eknas WALHI 76.     Mardiyah Chamim, Tempo Institute 77.     Tandiono Bawor Purbaya, PHR Perkumpulan Huma 78.     Arif Munandar, WALHI Jambi 79.     Wirendro Sumargo, Forest Watch Indonesia 80.     TM Zulfikar, individu 81.     Hariansyah Usman, Direktur Eksekutif WALHI Riau 82.     Ida Zubaidah, Direktur, Wahana peduli Perempuan Jambi/WPPJ 83.     Ismet Soelaiman, Direktur, WALHI MALUT 84.     Koesnadi Wirasapoetra, Sekretaris Jendral, Sarekat Hijau Indonesia 85.     Teddy Hardiyansyah, Kabut Riau 86.     Edo Rakhman, Direktur WALHI Sulawesi Utara 87.     Asman Saelan, LBH Buton Raya 88.     Wilianita Selviana, Direktur WALHI Sulawesi Tengah 89.     R. Yando Zakaria, Lingkar Pembaruan Desa dan Agraria./KARSA, Yogyakarta 90.     Adrian Banie Lasimbang, President, Jaringan Orang Asal SeMalaysia (JOAS)/ Indigenous Peoples’ Network of Malaysia 91.     Ramananda Wangkheirakpam, North East Peoples Alliance, North East India 92.     Joan Carling, Asia Indigenous Peoples Pact, Thailand 93.     Sandra Moniaga, Jakarta, Indonesia 94.     Muliadi SE, Diretktur PETAK DANUM Kalimantan Tengah 95.     Idham Arsyad, Konsorsium Pembaruan Agraria (KPA) 96.     Mukri Friatna, Eksekutif Nasional WALHI 97.     Sanday Gauntlett, PIPEC (Pacific Indigenous Peoples Environment Coalition) 98.     Rizki Anggriana Arimbi, Deputi WALHI Sulawesi Selatan 99.     Javier M. Claparols, Director, Ecological Society of the Philippines 100.    Agustinus Agus, LBBT, Pontianak 101.    Endah Karyani, individu 102.    Happy Hendrawan, Komunitas Transformatif Kalimantan Barat 103.    Maharani Caroline, Direktur, YLBHI - LBH Manado 104.    Budi Karyawan, AMAN-NTB 105.    Taufiqul Mujib, Indonesian Human Rights Committee for Social Justice (IHCS) 106.    Giring, Perkumpulan Pancur Kasih, Pontianak, Kalimantan Barat 107.    Hironimus Pala, Yayasan Tananua Flores Ende NTT 108.    Philipus Kami, JAGAT,  NTT 109.    Nikolaus Rima, AMATT Ende, NTT 110.    Agus Sarwono,TiLe, Individu 111.    Dickson Aritonang, Yayasan Ulayat Bengkulu 112.    Mina Susana Setra, Aliansi Masyarakat Adat Nusantara (AMAN) 113.    Alma Adventa, PhD, University of Manchester, UK 114.    Marianne Klute, Watch Indonesia!, Jerman 115.    Aidil Fitri, Yayasan Wahana Bumi Hijau - Sumatera Selatan, Indonesia 116.    Anja Lillegraven, Rainforest Foundation Norway (RFN) 117.    Judith Mayer, Ph.D., Coordinator, The Borneo Project, Earth Island Institute 118.    Septer Manufandu, Forum Kerjasama  LSM di Tanah Papua 119.    Andik Hardiyanto, The Indonesian Social and Economic Rights Action Network 120.    Hartono, WALHI Sulawesi Utara 121.    Stephanie Fried, `Ulu Foundation 122.    Sarah Lery Mboik, Individu (Anggota DPD RI Daerah Pemilihan NTT) 123.    Julia Kam, Pontianak-Indonesia 124.    Jupran Abbasri, Ketua Lembage Jurai Tue-Semende 125.    Agapitus, AMAN Kalimantan Barat 126.    Sainal Abidin, Perkumpulan WALLACEA Palopo 127.    Macx Binur, Belantara Papua-Sorong 128.    Sri Hartini, Walhi Kalimantan Barat 129.    Ecologistas en Acción (Spain) 130.    Muhammad Juaini, GEMA ALAM NTB 131.    Budi Arianto, Banda Aceh, Indonesia 132.    Solihin, Individu 133.    Aylian Shiau, Kahabu Culture and Education Association of Nantou County 134.    Sultan Darampa, Sulawesi Channel 135.    Thomas Irawan Sihombing, Perkumpulan KABAN, KalBar 136.    Yohanes RJ, Sintang, Kalbar Indonesia 137.    Ranto Sibarani, Sekretaris Eksekutif, KOTIB 138.    Nikmah, INFID 139.    Ahmad, Deputy Director, ED. Walhi Sulteng 140.    Sarma Hutajulu, Koordinator, Jaringan Aktifis Perempuan/Pendukung Penguatan Pr Sumut 141.    Hamsuri, Individu, Balikpapan, Indonesia 142.    Imanche Al Rachman, Koordinator Eksekutif Komnasdesa-Sultra 143.    Asep Yunan Firdaus, HuMa 144.    Juliade, Individu, Banjarmasin, Kalimantan Selatan 145.    Arief Candra S Hut, Kelompok Studi Konservasi (KSK) HIMBA 146.    Chia Tek-khiam, Director, Takao Indigenous Kakatao Council, Taiwan 147.    Serge Marti – LifeMosaic 148.    Betty Tiominar, Bogor 149.    Rukmini Paata Toheke, AMAN 150.    Carolyn Marr, UK Coordinator, Down to Earth 151.    Yuni Riawati, Ketua BEK SP Komunitas Mataram 152.    Geert Ritsema, Coordinator International Affairs, Friends of the Earth Netherlands 153.    Gindo Nadapdap, Kelompok Pelita Sejahtera  (KPS) Medan, Sumatra Utara 154.    Eko Waskito, Lembaga Tiga Beradik Merangin, Jambi Sumatera Indonesia 155.    Haryanto Ramli, Tanjungpandan – Belitung, Provinsi Kep. Bangka Belitung 156.    Benget Silitonga, Sekretaris Eksekutif Perhimpunan BAKUMSU 157.    Yuyun Kurniawan, Yayasan Titian 158.    M. Rafli Kaitora, Ketua PD.AMAN Enggano 159.    Ronny Christianto, Sahabat Masyarakat Pantai (SAMPAN), Kalimantan Barat

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